The St Barbara Ltd (ASX: SBM) share price has jumped 1.7% higher today as ASX gold shares continue to surge.
Why the St Barbara share price is climbing higher
There are a couple of factors pushing the St Barbara share price higher in the ASX afternoon session.
For starters, the Aussie gold miner released a quarterly production update to the market in the early afternoon.
A recent "fall of ground" at the miner's Gwalia mine in Western Australia has temporarily halted operations. This will impact on the first quarter result.
However, St Barbara is expecting to recover the shortfall next quarter with full year production guidance maintained at between 175,000 and 190,000 ounces.
It's not just that announcement that is pushing the St Barbara share price higher today. Fellow ASX gold shares are surging too.
In fact, the Saracen Mineral Holdings Ltd (ASX: SAR) share price is topping the S&P/ASX 200 Index (ASX: XJO) winner boards on Friday.
That has been largely driven by risk-off moves across both global and domestic markets. Investors have been selling down their riskier, growth holdings, particularly in the tech sector, with gold providing a safe haven of sorts.
St Barbara shares are now up 23.6% in 2020 which is welcome news for investors. Many of the ASX gold shares are surging in value this year thanks to the coronavirus pandemic.
Investors have been spooked by the March bear market and subsequent rebound. That means ASX gold shares like St Barbara have been in high demand this year for the precious metal's perceived safety.
Should you buy right now?
The St Barbara share price has done well this year but I won't be buying. However, I think it could provide a good hedge against further downside in 2020.
Shares in the gold miner are trading at a price to earnings (P/E) ratio of 21.9 with a 2.4% dividend yield. Throw in some inflation hedging properties for gold and it's worth a look for concerned investors.
